Following announcement of SIA Groups first quarterly loss in 6-years, the group says it will shut down its wholly owned cargo subsidiary and re-integrated cargo flying as a division within SQ airlines.

SIA says move will help improve efficiency as the cargo division has shrunk over recent years and is expected to be completed in the first half of 2018. The majority of SIA Cargo's nearly 900 employees will be retained in the new cargo division, while some will be transferred to other divisions, the carrier said.

SIA also confirmed the planned freighter fleet will shrink to 7 747-400F frames after removal of 8th frame in April in preparation for return to lessor.

SIA Cargo was formed in 2001 as separate subsidiary with own AOC and operated a peak of 17 747-400Fs at one time.

I assume that these B744Fs are fully paid off by now hence no need to splurge money on purchasing new B77Fs...am I right?

Of remaining 7 frames, 5 are owned. Remaining 2 are on leases. Suppose the leased aircraft will go back as terms end. They returned 2 in 2016 and now 1 in April, so they dont seem to have appetite to keep them.

trex8 wrote:

What advantages do these stand alone companies provide compared to being part of the main airline?

Own staff, own set of books/ P&L, reduced risk to parent company, easier to spin off/sell, etc.. I'm sure there were other tax/financial/operational incentives as well to spin it off back in 2001 and set up the cargo company.

What advantages do these stand alone companies provide compared to being part of the main airline?

Own staff, own set of books/ P&L, reduced risk to parent company, easier to spin off/sell, etc.. I'm sure there were other tax/financial/operational incentives as well to spin it off back in 2001 and set up the cargo company.

As far as staff goes, it was the same as SQ. At least crew and maintenance were/are the same.I suspect that part of the problem that they are having is not having a passenger 744 fleet to spread the costs. Having a subfleet of only 7/8 frames with its own crew and support staff in a time when cargo revenue is in decline, makes for very poor economics.

I'm actually surprised they held out this long, cargo market is going through a bit of a downturn and dedicated freighter fleets across the board seem to all be reducing in numbers.

That is interesting to hear as I was just told that the airline I work for is having the best year in 8 years in terms of cargo revenue and tonnage. It is all belly freight though.

77H

Belly freight is key. There has for too long been an incentive to design away from main deck. Even the AN-124s are generating less revenue. The new widebodies are really two deck combis: 77W, 789, 78J, A359, and A35K. Even the 788 has much more cargo than prior planes.

There has also been a push toward rail, trucks, or ships due to the intense competition driving down rates. I personally think the silk road railroad will cut rates. Sad as an Aviation fan, but economics is brutal.

Lightsaber

You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.

What advantages do these stand alone companies provide compared to being part of the main airline?

Not a thing!! The maintenance is the same if not more, the piloting is the same if not more expensive, the ground handling is the same, There's No real advantage unless you can get crews, ground handling, and Maintenance at a lower cost.

Not a thing!! The maintenance is the same if not more, the piloting is the same if not more expensive, the ground handling is the same, There's No real advantage unless you can get crews, ground handling, and Maintenance at a lower cost.

You are assuming its the same employees. Many cargo subsidiaries have entirely different staff, different seniority list, contracts etc. Same goes for ground staff.Stand alone ops are often allow for much more nimble enterprise without worry about the heavy overhead that the regular mainline operation might bring.

I'm actually surprised they held out this long, cargo market is going through a bit of a downturn and dedicated freighter fleets across the board seem to all be reducing in numbers.

That is interesting to hear as I was just told that the airline I work for is having the best year in 8 years in terms of cargo revenue and tonnage. It is all belly freight though.

77H

Belly freight is key. There has for too long been an incentive to design away from main deck. Even the AN-124s are generating less revenue. The new widebodies are really two deck combis: 77W, 789, 78J, A359, and A35K. Even the 788 has much more cargo than prior planes.

There has also been a push toward rail, trucks, or ships due to the intense competition driving down rates. I personally think the silk road railroad will cut rates. Sad as an Aviation fan, but economics is brutal.

Lightsaber

SIA states clearly that their cargo capacity has increased by 4-5% even with the reduction of dedicated 747s. It is all into the belly of 777/A330/A350s. And with the A330 going out and A350 coming in, it is going to increase cargo capacity even more.

There has also been a push toward rail, trucks, or ships due to the intense competition driving down rates. I personally think the silk road railroad will cut rates. Sad as an Aviation fan, but economics is brutal.Lightsaber[/quote]

Indeed, who would have thought that you could run a train from China to England and make a profit?

you don't get a second chance to make a first impression!Growing older, but not up.